To supporters it is a prized opportunity to shape the future of Europe’s financial sector. To detractors it has become an open invitation for powerful lobbyists to wield influence over EU rulemaking. This week, close to 1,000 people sporting lanyards will mill around under corporate logos, and wander in and out of panel discussions in Helsinki, at one of the world’s largest financial services conferences: Eurofi.
Someone walking in off the street might assume that it is an official EU event: the logo of the Finnish government’s EU presidency will be prominently displayed. This week’s gathering is timed to coincide with a meeting of EU finance ministers happening elsewhere in the city, with some participants flitting between both events.
But the person walking in off the street would be wrong: the event is very much in private hands. While its name is little known to the wider public, the twice-yearly Eurofi conferences have become a fixture on the EU calendar over the past decade — a forum to debate every big financial policy shift since the 2008 crash.
Among those attending will be hundreds of influential EU and national officials: European civil servants that craft the rules to curb bank risk-taking, or powerful regulators able to take decisions that can wipe billions off balance sheets. Most of the rest will be financial services professionals and lobbyists, armed with packed meeting schedules to extract the maximum benefit from the 72 hours or less they will spend in the Finnish capital.
Describing itself as “the European think-tank dedicated to financial services”, Eurofi is actually a membership organisation for more than 60 of the world’s most powerful financial institutions. It organises events at which their voice will be heard by those who write the rule book for Europe’s financial services industry.
Dubbed by some past attendees as the “Davos of financial regulation”, Eurofi has previously attracted the likes of European Central Bank president Mario Draghi, former Goldman Sachs chief executive Lloyd Blankfein and Bruno Le Maire, French finance minister.
Yet in an era of growing demand for transparency and accountability from public officials, Eurofi conferences have managed to steadily grow in size, curtail press access (the Financial Times was once a media partner but journalists have been barred from attending since 2013) and still face little scrutiny. Many EU officials contacted by the FT see going to Eurofi as part of their job. But there is growing unease in some quarters about the influence it allows lobbyists to wield.
Most of the more than 30 panel discussions at a Eurofi conference in Vienna last year were chaired by the public sector — including senior European Commission officials, ECB executive board members and the heads of EU regulatory agencies. They have some input on the agenda — the conferences are advertised as being organised in “association” with the country holding the rotating EU presidency — but it is ultimately set by Eurofi, which also controls the guest list.
One former EU official told the FT that they had felt uncomfortable after discovering the extent of Brussels’ engagement with an event that was in private hands, and the sheer volume of officials there, but that it had become standard practice to go.
“You know how traditions start,” says another former official. “For people with a shorter memory they think there is a connection [to the EU] when there is just a correlation.”
Sven Giegold, a German Green member of the European Parliament who specialises in financial regulation, is sceptical: “Eurofi is a perfect lobbying party. All key decision makers in business, [public] authorities and politics meet undisturbed by consumer groups and critical academics.
“I have never seen a forum like this in Brussels before,” he adds.
Although it describes itself as a think-tank, Eurofi defies categorisation. It is a not-for-profit association whose income is more than half that of Brussels’ two biggest think-tanks, but it has a fraction of the staff and publishes little original research.
Instead, its focus is on the organisation of two large conferences a year and the materials that go with them. Its 66 members — stretching from JPMorgan to BNP Paribas and BlackRock — collectively paid more than €3m in basic fees and sponsorship last year, according to accounts seen by the FT. Didier Cahen, its secretary-general, and its two senior staff each received gross payments of more than €500,000 in consultancy fees in 2018.
“We do not play the role of intermediary between the public sector and private sector authorities,” says Mr Cahen, who insists Eurofi exists to provide a neutral platform for discussion. “It’s not our role to control or influence any of the networking that happens at the events.”
Describing it as a “Roman forum” for the free exchange of ideas, David Wright, a former senior European Commission official who chairs Eurofi on a pro bono basis, says its aim is to give all interested parties a place to debate, including academics, non-financial corporates and consumer groups.
“We try to accommodate everybody,” he says, noting that the campaign group Better Finance was among those that attended the most recent Eurofi in Bucharest. Participation is free — Eurofi sends out hundreds of invitations to each event, many going to public officials or to interest groups for different parts of the financial sector.
“We try to discuss the frontier issues,” Mr Wright says. Topics to be discussed in Helsinki include Brexit, climate change and how to improve the competitiveness of the EU financial sector, according to a draft agenda.
The type of meetings that take place at the events between public officials and market participants are routine. EU civil servants often meet the companies they regulate in their offices in Brussels. There is also no suggestion that the discussions break any rules.
But it is far less usual to have so much EU involvement in an event where the access, agenda and organisation is entirely controlled by industry — and where the highest-paying sponsors enjoy more sway, as well as the best opportunities to push their case with decision makers.
And while some companies grumble about costs — Eurofi charges a basic annual €50,000 membership fee — such is the value of the conference that they work out their lobbying strategies for the events months in advance. The €50,000 guarantees participation at Eurofi, speaking slots on conference panels and seats at the gala dinner.
Some financial companies are prepared to pay twice that amount each year in sponsorship fees, bringing added benefits such as meeting rooms and better speaking opportunities. “That is the way it rolls. You pay money to get your issues on the agenda,” says one regulatory executive at a big international bank, who describes the event as “a huge lobbying circus”.
Eurofi in numbers
66
Members including some of the biggest names in financial services from JPMorgan to BlackRock
€50,000
The basic annual membership fee for access to Eurofi events. Some members pay twice that for an enhanced package
>€3m
Income raised last year by Eurofi from its members according to accounts seen by the Financial Times
Questions were raised in the Dutch parliament last year following an article on Eurofi by investigative website Follow The Money that explored the access it provided to decision makers. Renske Leijten, a socialist MP, asked whether it was appropriate for the Dutch government to engage with “an organisation that presents itself as a consultation platform [but] is actually a lobby organisation for the financial sector”.
Wopke Hoekstra, the Dutch finance minister, replied: “It can be useful for officials and ministers to attend”.
Established in 2000, Eurofi was the brainchild of three Frenchmen: Jacques de Larosière, a former IMF managing director and governor of the Banque de France; Daniel Lebègue, a former high ranking French civil servant and banker who went on to run Transparency International France; and Mr Cahen.
Mr Lebègue says the trio saw the need for a “stakeholders’ forum” to discuss how Europe could seize the opportunities of the newly born single European currency and of the EU’s then nascent project to create a single market for financial services. The concept was to bring together “public and private actors, with the trade unions, NGOs, associations, especially academics”.
Attracting a membership drawn from the financial services industry was always central to the plan. The EU commission was an early cheerleader, seeing it as an opportunity to build consensus around the legislation needed to deepen the single European market.
Mr Lebègue says the star power of Mr de Larosière — one of his generation’s most important EU financial policymakers — was key to convincing the private sector and public institutions to take the initiative seriously. But it was after the 2008 crash, he says, that Eurofi came into its own.
Participants agree that its conferences became essential forums for EU authorities to present their regulatory response to the crash — a link strengthened when Mr de Larosière was asked by the commission in October 2008 to lead work on designing a new system of financial supervision for Europe.
But, Mr Lebègue — who left Eurofi in 2011 — says it also evolved into “a very effective instrument for the big banks to lobby the regulators”.
“The big financial actors, in particular the big banks were on the defensive,” he says, “they needed a club to support their interests”.
This shift in emphasis was laid bare at a Eurofi conference in Madrid in April 2010, Mr Lebègue says, when senior bankers made a “co-ordinated” push against planned new rules. He recalls a series of speeches warning of dire economic fallout from the proposals — subsequently adopted by the EU — to toughen bank capital rules and place bank bondholders on the hook for losses.
“From 2007-08, Eurofi became an instrument, not the only instrument, of the big financial institutions to express their views, their opposition to regulation,” he says, explaining that it was his reason for leaving.
Eurofi conferences take place in the same city, and at the same time, as official meetings of EU ministers and central bank governors. But they are organised by a small team, based in Paris, that has no affiliation with the EU, and that is paid for by Eurofi’s members.
Rather than a large academic staff, it relies on Mr Cahen and two other officials to produce the conference materials — briefing notes on regulatory issues, reports on past events, a magazine — that form the bulk of the association’s written output.
Eurofi’s financial firepower saw it spend €3.4m last year, with €1.3m going to logistics and project management and €1.4m for work on regulatory topics. An external management company in Brussels is contracted to handle event logistics; Mr Cahen and his colleagues — Jean-Marie Andrès and Marc Truchet — draft the agenda, liaise with speakers and prepare debates.
Regulators justify attending Eurofi to keep across developments while the commission and the ECB say they ensure that participation by their officials is in line with their ethics rules.
The commission says that it monitors the number of participants “to ensure that it is proportionate, relevant to commission priorities and that participation does not prejudice the interests of the commission or raise issues in terms of independence, impartiality or credibility of our institution”.
The ECB says its rules “take into account the relevant institutional and business interest, but also the principles of neutrality and level playing field and the need to avoid granting one requester an advantage over competitors”.
Yet some remain unconvinced, saying that the relationship between decision makers and industry is too cosy, and that, given the privileged status it enjoys, Eurofi should ramp up its efforts to diversify participation and boost transparency.
“It’s not a real dialogue,” says Mr Giegold, the German MEP, citing the importance of consumer organisations, critical academics and civil society to the debate. “It’s a dialogue between everyone who is rich enough to buy themselves a seat.”
Additional reporting by Claire Jones in Frankfurt
Post-crisis lobbying: Eurofi’s role in reversing curbs on securitisation
Eurofi describes itself as a “platform for exchanges between the financial services industry and the public authorities,” but an internal document seen by the Financial Times shows that the organisation has lobbied for some causes.
The 2014 Eurofi report describes a chain of events ending with the EU throwing its weight behind reviving the market for securitised debt — bundled loans sold off in tranches with different levels of risk.
Securitisation was one of the main vehicles for the excessive risk-taking that led to the 2008 financial crisis, notably because of the selling on of subprime mortgage debt. But by 2014, the financial sector was seeking an easing of post-crisis regulatory standards, arguing that a cleaned-up version of the securitisation market would allow them to boost lending to businesses and households.
The Eurofi report reveals that in September 2014 the organisation’s then chairman, Jacques de Larosière, met Pier Carlo Padoan, then Italy’s finance minister, in Milan in September 2014 “during which the Eurofi proposals on securitisation were discussed”. Italy held the EU’s rotating presidency in the second half of 2014.
Following the meeting, the document says, Mr Padoan wrote to Michel Barnier, the then EU commissioner in charge of financial services policy, “stressing the importance for the EU economy of relaunching high-quality securitisation”.
The Eurofi document notes that EU finance ministers in December 2014 agreed on “the need to foster an appropriately structured and regulated European securitisation market”, asking the European Commission to make proposals.
The commission made that legislative proposal in September 2015. The rule changes were approved by governments and MEPs two years later and took effect this year.
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